Will Smith's brother-in-law Dee Lawrence Downs has been implemented in a major drug dealing scandal where apparently he sold KILOS of cocaine to undercover police!!!

And even though Will Smith has nothing to do with that guy - it is still close enough to him that sources swear he's more than perturbed by this news!

Here's what one source said:

“Having a drug felon in the family obviously doesn’t square with Will’s clean-cut image. This arrest has to be beyond horrifying for him. This has got to be embarrassing for Will and his family,” the inside tells Star. “It is the first time they have been touched by scandal.”

Will himself has never been a fan of drugs even though he was raised around illegal substances growing up in West Philadelphia.

At one time he said:

"It wasn’t something I embraced. I never felt the necessity to use drugs.”

We're sure Will will be the anchor and strong person for his family to lean on during these harrowing times!